 Benazir Bhutto had been addressing rallies in many parts of Pakistan |
Ms Bhutto had just addressed an election rally in Rawalpindi when she was shot in the neck by a gunman who then set off a bomb.
At least 15 other people died in the attack and several more were injured.
President Pervez Musharraf condemned the killing and urged people to remain calm so that the "nefarious designs of terrorists can be defeated."
There were no immediate claims of responsibility for the attack.
Ms Bhutto, leader of the Pakistan People's Party (PPP), had twice been the country's prime minister and had been campaigning ahead of elections due in January.
It was the second suicide attack against her in recent months and came amid a wave of bombings targeting security and government officials.
Nawaz Sharif, also a former prime minister and a political rival, said her death was a tragedy for "the entire nation".
"It is not a sad day, it is [the] darkest, gloomiest day in the history of this country," he said, speaking at the hospital where she was taken.
The United Nations Security Council is to meet for emergency consultations shortly to discuss the situation in Pakistan after the killing.
Scene of grief
The attack occurred close to an entrance gate of the park in Rawalpindi where Ms Bhutto had been speaking.
Extremist groups have in their sights all those committed to democratic processes in Pakistan 
UK foreign secretary 
Police confirmed reports Ms Bhutto had been shot in the neck and chest before the gunman blew himself up.
She died at 1816 (1316 GMT), said Wasif Ali Khan, a member of the PPP who was at Rawalpindi General Hospital.
Some supporters at the hospital wept while others exploded in anger, throwing stones at cars and breaking windows.
Police in the north-western city of Peshawar are reported to have used tear gas and batons to break up a demonstration by angry Bhutto supporters and there were also protests in other cities.
Mr Sharif said there had been a "serious lapse in security" by the government.
But an old friend of Ms Bhutto, Salman Tassir, told the BBC World Service he did not think criticism should be directed at the government.
"There have been suicide attacks on Gen Musharraf also," he told Newshour.
"... I mean it is extremism and the fanatics who are to blame."
Earlier on Thursday, at least four people were killed ahead of an election rally Mr Sharif had been preparing to attend close to Rawalpindi.
Ms Bhutto's death has plunged the PPP into confusion and raises questions about whether January elections will go ahead as planned, the BBC's Barbara Plett in Islamabad says.
'Cowardly act'
The killing was condemned by the US, the UK and others.
"The US strongly condemns this cowardly act by murderous extremists who are trying to undermine Pakistan's democracy," US President George W Bush said.
"Those who committed this crime must be brought to justice."
UK Foreign Secretary David Miliband said he was "deeply shocked" by Ms Bhutto's death and said "extremist groups... [could] not and must not succeed".
Ms Bhutto returned from self-imposed exile in October after years out of Pakistan where she had faced corruption charges.
Her return was the result of a power-sharing agreement with President Musharraf in which he granted an amnesty that covered the court cases she was facing.
It was only a matter of time before the darker forces... carried out this action
Swaffham
But relations with Mr Musharraf soon broke down.
On the day of her arrival, she had led a motor cavalcade through the city of Karachi. It was hit by a double suicide attack that left some 130 dead.
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